Asia Stocks Drop on Earnings; Hurricane Shuts U.S. Market
Asian stocks dropped for a second day after companies including Honda Motor Co. reported earnings that disappointed investors and Hong Kong developers slid on a new real estate tax targeting foreign buyers.
Trading volume was below average across Asia as the Securities and Exchange Commission canceled all U.S. stock trading today as Hurricane Sandy barrels toward New York City. The MSCI Asia Pacific Index (MXAP) declined 0.2 percent to 121.36 as of 7:24 p.m. in Tokyo after earlier gaining 0.3 percent.
Honda, Japan’s third-largest carmaker, tumbled 4.7 percent after cutting its full-year profit forecast. New World Development Co. led Hong Kong’s property companies lower, dropping 6.4 percent. LG Display Co. climbed 7.6 percent in Seoul after posting its first profit in more than a year.
“Earnings have been downgraded quite a lot over the past few months, but I think they hit the level where perhaps the downgrades have stabilized.” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia) Ltd., which oversees about $8 billion. Hong Kong is “trying to slow speculative activity in the property market.”
The Nikkei 225 Stock Average swung between losses and gains before closing little changed on trading volume 23 percent below the 30-day average, according to data compiled by Bloomberg. Australia’s S&P/ASX 200 Index gained 0.1 percent, with 34 percent fewer shares trading hands than on average.
South Korea’s Kospi Index added less than 0.1 percent, while the Shanghai Composite Index slid 0.4 percent and Hong Kong’s Hang Seng Index declined 0.2 percent.
Futures on the Standard & Poor’s 500 Index fell 0.7 percent. The closure of equity trading in the U.S. may extend through tomorrow. Risks posed by Hurricane Sandy, expected to come ashore in southern New Jersey and potentially affect 60 million people, were deemed too great to require workers to travel.
“You’ll expect to see limited volumes over Monday and potentially Tuesday,” said Steve Goldman, managing director at Kapstream Capital in Sydney. “The storm, depending on how bad it is, could take markets down.”
Honda slid 4.7 percent to 2,399 yen, the biggest drop in a month. The carmaker cut its full-year profit forecast after Chinese consumers shunned Japanese brands amid a territorial dispute between Asia’s two-biggest economies.
Hong Kong imposed its first property tax on overseas buyers as U.S. monetary easing and record-low interest rates boost the risk of a housing bubble. Non-local and corporate buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang said on Oct. 26.
New World Development, which gets 46 percent of its revenue in the city, dropped 6.4 percent to HK$12.08. Sun Hung Kai Properties Ltd. lost 5.1 percent to HK$106.10. Henderson Land Development Ltd. retreated 6.4 percent to HK$53.25.
LG Display (034220) advanced 7.6 percent to 32,450 won, the highest level in 16 months. The company reported net income of 158.2 billion won ($144 million) on Oct. 26, following four quarters of losses as sales of flat-screen televisions fell globally.
China Petroleum & Chemical Corp., Asia’s biggest oil refiner, added 2.9 percent to HK$8.25. The company known as Sinopec posted better-than-expected third-quarter profit after the state raised retail fuel prices twice and higher petrochemical sales helped earnings.
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